Apple supplier Luxshare to control Taiwan rival’s iPhone site

APPLE’S key Chinese partner Luxshare Precision Industry Co is set to gain control of an iPhone assembly site run by a Taiwanese rival, as the US tech firm fosters ties with China-based suppliers to improve relations with Beijing.

Luxshare is set to buy a 62.5 per cent stake in Pegatron Corp’s Kunshan unit in eastern China for about 2.1 billion yuan (S$401.5 million), according to an exchange filing by the latter on Thursday (Dec 28). Taipei-based Pegatron currently assembles iPhones at its Kunshan campus and another site in Shanghai. 

The acquisition is expected to give Luxshare a better chance at competing with Taiwan’s Foxconn Technology Group, Apple’s primary manufacturing partner. Foxconn makes about 70 per cent of all iPhones, with the bulk assembled at its main site in central China. Luxshare did not respond to a request seeking comment. 

Apple has been cultivating Chinese suppliers including Luxshare, seeking to boost its standing in Beijing. The Cupertino, California-based company relies on the Greater China region for about 20 per cent of its total sales, prompting chief executive officer Tim Cook to say in March that the company’s relationship with the world’s second-largest economy is a symbiotic one.

Luxshare’s prominence within the Apple supply chain has risen swiftly in recent years. It now makes a range of products for the US customer, including iPhones, Apple Watches and the mixed-reality headset Vision Pro. In October, Cook visited a Luxshare plant and praised the Chinese company’s commitment to help Apple reduce carbon emissions. 

Yet as Apple cultivates mainland suppliers at the expense of Taiwanese ones, it is also shifting some production away from the region as tensions between Washington and Beijing persist. It is now relying on Foxconn and Pegatron to expand its manufacturing footprint in India. BLOOMBERG